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How to Not Run Out of Money in Retirement

How to Not Run Out of Money in Retirement

September 22, 2021

If you are like many Americans thinking about retirement, one of your biggest worries may be: “Have I got enough money to retire? What if I run out?” 

Research shows that you are not alone.

Worse Than Dying

A research study from Allianz Life shows that more than 60% of baby boomers are more afraid of running out of money than dying.

Younger people are more worried. The study showed that 77% of people aged 44-49 responded that they were more afraid of running out of money than dying. And, if they were married with dependents, the response was 82%.

Financial planners survey in a study for the American Institute of CPAs (AICPA) showed that 57% of respondents report that running out of money was the top retirement concern for clients.

But money is not the only worry. According to a study by the Transamerica Center for Retirement Studies found retirees most often cited:

  • Declining health that would require long-term care at 47%;
  • Reduction or elimination of Social Security at 47%;
  • Losing their independence at 38%; and then
  • outliving their savings and investments at 37%.

What If You Do Run Out of Money?

If you spend all your money. You can still count on any pensions from prior employers, and you will probably qualify for Social Security benefits. There are a couple rules to remember:

  • You need to qualify to receive Social Security income benefits. If you are working in the United States, and if you worked the equivalent of 10 years full-time, you qualify for Social Security benefits.

    Officially, the Social Security Administration rule is 40 Social Security Credits. Each year you worked there was a dollar amount of earnings needed to qualify for Social Security Credits. In 2021 it took $5,880 of earnings to qualify for four credits.
  • You must be at least a minimum age. The amount of your benefit will depend on your age when you begin to take benefits.
    • The current age for maximum Social Security Benefits is 70.
    • The full retirement age to receive full benefits depends on your age:
      • basic retirement age if you were born before 1937 is age 65.
      • If you were born between 1943 and 1954 full retirement age is 66.
      • If you were born in 1960 or later full retirement age is 67.
    • The earliest age to receive a reduced benefit is age 62. You will get between 20% and 30% less benefits each month for as along as you live.

Social Security Will Not Go Very Far

The maximum Social Security benefit for a worker aged 70 retiring in 2021 is $3,895 per month. At full retirement age it’s $3,011. And the average Social Security benefit in 2021 is just $1,543.

Your Healthcare May Change

If you do not have healthcare insurance through a prior employer, and your assets are gone, you will qualify for your state’s Medicaid health insurance program.

If you want to be sure that you don’t find yourself in this situation, here are a few things you can try to improve your chances of retirement success.

  • Move back the date you stop working for money.
  • Move back the date you plan to start your pensions and Social Security. Be sure to get the maximum Social Security benefit at age 70.
  • Work part time after retirement.
  • Increase your savings now.
  • Increase the returns on your investments now. You may want to consider guaranteed income products and long-term growth strategies to meet your future needs.
  • Reduce expenses now? Prioritize and only spend on what is most important to you.
  • Reduce costs by moving abroad.
  • Create a plan for long term care expenses.

There is a lot to think about when you consider retirement planning. To build a plan that is holistic and covers all aspects of your life requires some skill, experience, and perspective. I believe every family would benefit from the advice of a CERTIFIED FINANCIAL PLANNER™ professional.

To find a CFP® professional near you, start your search here.

As you visit with financial planners, I suggest a couple things to check:

  • Is the advisor always the client’s advocate – a fiduciary advisor?
  • Is the advisor paid by clients, not financial product manufacturer or distribution network? That would be a fee-first advisor.

These two points help assure that you are working with a professional who is committed to your best interest at all times. It seems sort of obvious to me that a professional would work in this way, but it’s not automatic.

A fiduciary, fee-first, CFP® professional can help you make great retirement income choices and develop a comprehensive financial plan that is driven by your goals and priorities and addresses all aspects of your financial life. With a big-picture approach, you will be better prepared to understand your options at every step along the way.

Yes, I am a CFP® professional. I’m always a fiduciary and I work on a fee basis. And yes, I’m still taking on a few great families to be part of my financial planning practice.

If you would like to talk me about your financial planning situation, follow this LINK to find a time for us to visit. The first meeting is always free.

If this article has you thinking about your own circumstances, contact my office at I am always happy to meet with people who are working on their retirement plans. Dunncreek Advisors does not provide legal or tax advice, nor is this article intended to do so.